Seller‘s Deed Not Properly Transferred

7 Replies

Hello, I have a lead on an Indiana property that is well-under market value. However, I’ve run into an issue regarding the deed. To add context, here is the situation: The seller was gifted the property in question, by a friend, prior to the friend‘s passing. That was nearly 20 years ago. The Issue is that the seller never took the necessary steps to get the deed transferred over. Therefore, the deed is in the name of the person who has been deceased for 20 years. The seller has been paying property taxes, and is current. What steps can be taken to prove ownership in order to get this sale completed? Would the seller’s time of occupancy be enough to prove ownership? Any insight is appreciated.

@Terry Sargent

A deed is an instrument used to make the transfer of ownership. It's not the ownership itself. Only the chain of title can prove ownership.

If there is nothing in writing, the friend doesn't own the house. Paying the bills is meaningless. Any heir of the deceased owner can walk up and make claims to the property.

If there isn't a will, and they never bothered to get a deed made for the transfer and record it properly, the friend doesn't really own anything.

It's possible that the friend of the deceased can make a claim of adverse possession. It's a little different from one state to another.

@Terry Sargent ,  In regard to "What steps can be taken to prove ownership in order to get this sale completed?"

Consult with an Attorney , but as a non-attorney, the steps include filing a "Quiet Title" action.  The seller who was gifted the property would get the title in his name by filing a law suit to "quiet" the title in his name.   In a quiet title action he would be making the claim that he has the right to the property via the now deceased former owner's gift to him and/or via the law of Adverse Possession as suggested by @Christopher Phillips

At the hearing(s) on a Quiet Title action the court will review the ownership evidence presented by all parties who show up. Since the last alleged transfer of ownership was around 20 years ago, it is most likely that just the current "gifted" owner would show up and only his evidence would be considered..

However, a key aspect of filing a Quiet Title action is the Court will require the filer to notify all persons with a recorded interest in the property (and their Heirs).  It takes some research, time and usually money.

You could also have the current owner who was "gifted" the property, sign over his not yet legally recognized interest to you via a Quit Claim deed.  Then you would proceed to file a Quiet Title Action yourself, based on the "gifting" and/or Adverse Possession that the issuer of the Quit Claim deed could have relied upon.   In theory, the issue of who gets clear title can even be decided solely upon consideration of affidavits -sworn statements, but most Judges prefer to question witnesses.  Let us know how it works out.

@Terry Sargent a potential problem with the quiet title will be your seller has no title to the property to quiet.  Without any evidence of ownership, a judge maybe persuaded but a title company might not. Without title insurance the property  may be unsalable. 

I had a very similar issue come up. We did a tax foreclosure on a property. The title company found a mistake in the foreclosure. The owner was dead the son of the owner was dead. Essentially there was no one to com e back against the title.  I said can we do a quiet title suit. The title company said NO, he couldn't insure a property even with a quiet title if he didn't believe we owned in the first place. 

I think the adverse possession idea is a better idea. 

Clearly this is something you need to talk to an attorney about and maybe a title company. No matter how i gets resolved legally, it still has to be something a title company will insure.

Both claims of ownership -- unrecorded gift AND adverse possession -- can be pursued in the same quiet title action. 

Tell the "seller" to call you in late 2019 / early 2020 once this has been completed. (Note that the price may not be well under market value at that point.)

Good Morning All, Thank you very much for all of this very useful insight. I am now working with a RE attorney. I will follow up with an update in the coming weeks. Much appreciated!